Clubbing of Income of a Minor Child [Section 64(1A)]

1. Clubbing of Income of a Minor Child in the hands of Father or Mother -

2. Certain incomes of Minor Child Taxable in the hands of Minor Child only:

3. When Clubbing of Income of Minor Child is not Attracted -

4. Exemption under Section 10(32) in case of Clubbing of Income of a Minor Child -

All income which arises or accrues to the minor child shall be clubbed in the income of his parent [sec. 64(1A)].

1. Clubbing of Income of a Minor Child in the hands of Father or Mother -

The income of minor will be included in the income of that parent whose total income [excluding the income includible under section 64(1A)] is greater.

The following points should be noted—

1. The income shall be clubbed in the hands of that parent whose total income (excluding the income of the minor) is greater.

   Where any income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.

   Example :

   A is minor child of X and Mrs. X. During the previous year 2018-19, income of A is Rs. 2,500 (this is the first income of A during his life time). During the previous year 2018-19, income of X is higher than that of Mrs. X. Consequently, income of A will be included in the income of X for the previous year 2018-19. In the subsequent years (during the minority of A), income of A will be included in the income of X, even if income of Mrs. X is higher than that of X in any of the subsequent years.

However, there is one exception. If in the subsequent year, the Assessing Officer wants to include the income of minor child A in the hands of Mrs. X, it can be done only if it is necessary to do so and that too after giving an opportunity of being heard to Mrs. X.

2. Where the marriage of the parents does not subsist, the income of minor will be includible in the income of that parent who maintains the minor child in the relevant previous year.

3. The minor’s income, in case both the parents are not alive, cannot be assessed in the hands of the grandparents or any other relatives or even in the hands of minor.

4. Where the income of a minor child has been included in the total income of a parent, such parent shall be entitled to an exemption to the extent of such income or Rs.1,500 whichever is less, in respect of each minor child whose income is so included.

2. Certain incomes of Minor Child Taxable in the hands of Minor Child only:

The following income of a minor shall not be clubbed and will be taxable in the hands of the minor himself:

1. Any income of a minor child suffering from any disability of the nature specified in section 80U like physically disabled, totally blind, etc.

2. Such income which accrues or arises to the minor child on account of any manual work done by him

3. Such income which accrues or arises to the minor child on account of any activity involving application of his skills, talent or specialised knowledge and experience.

3. When Clubbing of Income of Minor Child is not Attracted -

In the cases given below, clubbing provisions of section 64(1A) are not applicable —

1. Income of minor child (from all sources) suffering from any disability of the nature specified under section 80U is not subject to clubbing provision given above.

2. Income of minor child on account of any manual work.

3. Income of minor child on account of any activity involving application of his skill, talent or specialised knowledge and experience.

4. Exemption under Section 10(32) in case of Clubbing of Income of a Minor Child -

In case the income of an individual includes an income of his or her minor child in terms of section 64(1A), such individual shall be entitled to exemption of Rs. 1,500 in respect of each minor child.

Where, however, the income of any minor so includible is less than Rs. 1,500, the aforesaid exemption shall be restricted to the income so included in the total income of the individual.